Northern Trust Enhances Dynamic Currency Hedging Capability

Key Terms

dynamic currency hedging financial

Dynamic currency hedging is a strategy that continually adjusts how much foreign-exchange risk a portfolio or company protects against as exchange rates move, rather than fixing protection at one level. Think of it like a thermostat that increases or reduces heating to balance comfort and cost; for investors it helps smooth reported returns and cash flows while still allowing some participation in favorable currency moves, though it can add trading costs and complexity.

fx financial

fx stands for foreign exchange, the system of buying, selling and converting one currency into another. For investors, fx matters because changes in exchange rates can raise or lower a company’s reported sales, costs and profits when business crosses borders—like how the same amount of money can buy more or less abroad—so movements in fx can affect earnings, valuation and investment returns.

algorithmic trading technical

Algorithmic trading is the use of computer programs to automatically decide, submit and manage buy or sell orders in financial markets according to predefined rules or mathematical models. Like a high-speed autopilot following a recipe for timing, price and size, it executes trades faster and more consistently than humans, which matters to investors because it can change how quickly orders fill, affect trading costs and influence short-term price movements and market stability.

Collaboration with Berenberg Offers AI-based Models for Currency Risk Management

LONDON--(BUSINESS WIRE)-- Northern Trust (Nasdaq: NTRS) has added Berenberg to its framework of dynamic currency hedging solutions, enabling Northern Trust’s clients to incorporate third-party currency management strategies, such as Berenberg’s AI based models, into their range of risk management choices.

Northern Trust’s dynamic currency hedging solution allows clients to adjust hedge ratios based on real-time market conditions and model-driven forecasts. By incorporating capabilities from solutions such as Berenberg’s, Northern Trust’s clients can choose to add models that complement their investment strategies, helping them to reduce volatility and improve risk-adjusted returns. The solution is available across the US, UK, Europe, Australia, and Canada, and is designed to support both asset owners and asset managers.

“As we start to see increased volatility in markets and data-driven strategies become more critical, our clients are increasingly seeking novel solutions to manage currency risk,” said Marcus Fernandes, global head of currency management at Northern Trust. “With dynamic currency hedging, we’re offering clients greater optionality when it comes to currency management.”

Berenberg is one of Europe’s oldest banks and is among the leaders in applying artificial intelligence to financial markets. Its proprietary FX alpha and risk models are designed to capture market signals and support dynamic risk management within currency hedging strategies.

Nico Baum, head of solutions at Berenberg said: “We’re excited to collaborate with Northern Trust to bring our AI-driven FX models to a broader institutional audience. Our approach is designed to help investors make more informed hedging decisions in an increasingly technology driven and complex global environment.”

Northern Trust delivers a full suite of global foreign exchange solutions including FX outsourcing, tailored currency management solutions, and algorithmic trading from trading centres in London, Chicago and Singapore.

About Northern Trust Banking & Markets

Northern Trust Banking & Markets is comprised of a number of Northern Trust entities that provide trading and execution services on behalf of institutional clients, including foreign exchange, institutional brokerage, securities finance and transition management services. Foreign exchange, securities finance and transition management services are provided by The Northern Trust Company (TNTC) globally, and Northern Trust Global Services SE (NTGS SE) in the European Economic Area (EEA). Institutional Brokerage services including ITS are provided by NTGS SE in the EEA, Northern Trust Securities LLP (NTS LLP) in the rest of EMEA, Northern Trust Securities Australia Pty Ltd (NTSA) in APAC and Northern Trust Securities, Inc. (NTSI) in the United States, member FINRA, SIPC and a subsidiary of Northern Trust Corporation.

About Northern Trust

Northern Trust Corporation (Nasdaq: NTRS) is a leading provider of wealth management, asset servicing, asset management and banking services to corporations, institutions, affluent families and individuals. Founded in Chicago in 1889, Northern Trust has a global presence with offices in 24 U.S. states and Washington, D.C., and across 22 locations in Canada, Europe, the Middle East and the Asia-Pacific region. As of December 31, 2025, Northern Trust had assets under custody/administration of US$18.7 trillion, and assets under management of US$1.8 trillion. For more than 135 years, Northern Trust has earned distinction as an industry leader for exceptional service, financial expertise, integrity and innovation. Visit us on northerntrust.com. Follow us on Instagram @northerntrustcompany or Northern Trust on LinkedIn.

Northern Trust Corporation, Head Office: 50 South La Salle Street, Chicago, Illinois 60603 U.S.A., incorporated with limited liability in the U.S. Global legal and regulatory information can be found at https://www.northerntrust.com/terms-and-conditions.

About Berenberg

Berenberg was founded in 1590 and is now one of Europe's leading private banks, with business divisions in wealth and asset management, investment banking and corporate banking. The Hamburg-based bank is managed by personally liable partners and has a strong presence in the financial centres of Frankfurt, London and New York.

View source version on businesswire.com: https://www.businesswire.com/news/home/20260226821048/en/

Northern Trust Media Contacts

Camilla Greene

+44 (0) 20 7982 2176

Camilla_Greene@ntrs.com

Simon Ansell

+ 44 (0) 20 7982 1016

sa777@ntrs.com

Berenberg Media Contact:

Timo Lüllau-Mortensen

Head of Communications

+49 69 910 30 515

timo.luellau-mortensen@berenberg.de

Source: Northern Trust